Need to find more money in your budget? The best place to start is with your monthly expenses. It’s often much easier to lower your expenses than add income.
A few small tweaks can help you save hundreds on everything from groceries to insurance. It may take more legwork to cut down big ticket items, such as a house, but working on these items can often yield a bigger boost to your budget.
Here are ways you can lower your bills and save on your monthly expenses:
Housing is likely one of your most costly bills each month. Lowering your monthly housing payment is a heavier lift but can reap the biggest improvement to your budget and can even yield a big savings. Learn how you can save on mortgage, rent and insurance.
1. Refinance your mortgage. The best thing you can do is lower your interest rate by a couple of percentage points. It can end up saving you hundreds of dollars each month. It is best to try and have a higher credit score so you can get the best rate possible then shop around and compare rates from multiple lenders. If you don’t have the best credit yet, consider alternative ways to build your credit or you can try repairing your credit.
2. Get rid of private mortgage insurance. If you put less than 20% down when you purchased your home you likely had to get private mortgage insurance, or PMI. Your lender may drop the PMI requirement once the balance on your mortgage hits 78%. You can ask your lender to cancel it once you hit the 20% mark.
A PMI payment is based on the loan amount and the borrower’s credit score. It’s generally 0.3-1.1% of the loan value. If you took out an FHA loan you cannot cancel the mortgage insurance and would need to refinance into a conventional loan likely requiring 20% down.
3. Downsize your rental. Moving your family into a smaller unit can easily lower your rent payment by $200-300 or more, depending on the city. It may mean doubling up a bedroom for a little while but it could be worth it in the long run to pay off bills or build an emergency fund.
4. Get a roommate. It may not be the best option for you but getting a roommate to split all of the bills can easily add anywhere from $250-500 or more back in your pocket each month. For example, a two-bedroom apartment in Detroit is nearly $1,400. If you split this between two people you’re only paying $700 a month instead of $1,400.
5. Negotiate the price. If moving to a cheaper house or getting a roommate isn’t an option try negotiating with your landlord. They may be willing to lower the rent in exchange for a longer lease or even if you repair some things yourself, like painting the outside of the house.
6. Get multiple rates. The best thing you can do with pretty much anything is to get a second opinion. You’ll want to get several quotes before settling on a single policy. You can leverage the quotes against each other as well. It’s best to reach out to new insurers every 1-2 years just to make sure you’re not overpaying on homeowner’s insurance.
7. Bundle as much as you can. You can often lower your homeowner’s insurance premium by 10-20% depending on your insurance provider by bundling auto, pet or other types of insurance.
8. Look for discounts. Ask your insurer for available discounts. They usually offer several discounts such as paying in full each year, doing automatic payments or even having an advanced security system.
Utilities (Power, Gas, Phone)
It may not seem like much but your utilities can be a smart place to look for some quick savings and some good spending habits. You’d be surprised how much you can save by just turning your thermostat down by 1 degree or cancelling the subscription service you watch only every other month.
Cable & Internet
9. Remove all extra services added. You can often lower your bill by at least $10 a month by removing some of the add-ons they charge you for, such as DVR or extra equipment. Instead of opting to pay $10-15 a month for an extra device just pick up another service such as Roku or Sling. In most cases you may not even need cable and internet and can do with only one. You can shave off over 50% of your bill by just moving forward with internet and choosing a few streaming services like Hulu or Netflix.
10. Bundle all of your services together. If you’re getting cable, internet and phone you are better off bundling and getting a package deal. Many large providers, such as Comcast or AT&T, offer deals if you have your TV, cell phone, internet and even landline phone all with one service. It can be upwards of 2x the cost if you were to buy each of these separately.
Electricity, Heat & Water
11. Turn down your thermostat and use less water. By keeping your thermostat at a set temperature every day and using less water than normal can end up saving you $10-$40 a month or more. If you won’t be home or it’s starting to get warmer out then turn down your thermostat and grab an extra blanket or put on a hoodie. By turning down your thermostat 5-10 degrees you can save almost 10% of your yearly costs.
12. Upgrade appliances to be energy efficient. If your stove, dryer or other device is more than 5-10 years old it may be time for you to get a new one. New machines are much more efficient at using energy and resources often saving you tons of money on your monthly bills. It may take a little investment up front but over time you’ll see the return.
13. Reduce wasteful energy. Have a computer you leave on 24/7? How about a TV that just seems to be on all day while no one is watching? Have your parents ever yelled at you about lights? Being mindful of devices that are using your energy. If they are plugged in to a wall they are using energy and running up your bills even if you don’t think they are.
14. Take advantage of automatic payments. Not only does automatic payments help you avoid any potential late fees, in most cases you can get a discount by paying automatically. Many services will take $5-10 off your monthly bill by just having automatic pay setup.
15. Double check you’re not paying for added services. In some cases some phone providers will sneak in insurance or other services that you may not use or need. Make sure you’re not paying for their most expensive insurance plan as there may be an option for a cheaper one that provides enough coverage for you. This can often save you a few extra dollars per month.
16. Consider switching your carrier or plan. Look into how much data usage you have and what you’re paying for. You might find that you’re paying for a lot more than you’re using and getting a smaller plan could save you $20 or more per month. In most cases you can switch to another carrier and sign a 2-year contract for a much cheaper price. It’s often recommended to shop around every 2-years for a new carrier or plan.
Automotive & Transportation
The second biggest spend area after housing for most people is their car or the transportation services they use on a monthly basis. This is an area in your budget that sits on the grey area of “needs” and “wants” but can have a large impact on your budget with being frugal. Aside from a credit card, getting a car loan is often the first thing a young adult gets with their credit.
17. Refinance your auto loan. You can lower your car payment quite a bit by qualifying for a better interest rate or extending the length of your loan. If you recently paid of debts and saw a good credit increase, it may be wise to take advantage and refinance your car for a better rate where you can likely shave off thousands in the long run paying off your car.
18. Sell your car. If you don’t need a car, sell it. If you’re typically ridesharing or live in a city where you can walk or bike ride to work it may be wise to just sell your car. Not only would you get rid of a payment if you had one but you’d get rid of automotive insurance as well which can be anywhere from $100-200 a month or more on its own. In some cases you can sell your car and then use the money left over to pay off the loan and get a cheaper more frugal car as well.
19. Do a “lease swap”. A lease swap, or lease takeover, is where you essentially have someone else take over your lease payments for you and you give the car to them. This person will still need to qualify and secure financing for the car themselves but it can be a good way to get out of a lease you can no longer afford. There are several sites with people looking to take over leases.
20. Skip the bus for a bike ride or walk. In most cases you’ll save $30-50 per month or more by simply bike riding to work or walking to your job if you’re able to. This is great for people who live in a major city and can save you tons more without having to support a car, pay insurance, etc.
21. Increase your deductible. This will increase your out-of-pocket costs if you get in an accident but it can lower your monthly payment quite a bit. If you have built out a savings and can cover it if an accident occurs you can save $20-30 a month by doing this.
22. Reduce your coverage. If you have an older car then full coverage may not be necessary. You should consider dropping your coverage to save anywhere from $50 to $100 per month. If your car is not worth your deductible then you’re overpaying.
23. Ask your provider about discounts. If you’re in the military, a first responder or even if you’re a good student you can likely get discounts. Look for ways you can bundle your auto into other insurance plans like homeowners or renters insurance.
Food & Groceries
Contrary to popular belief, you don’t have to resort to eating instant noodles or hamburger helper to save money with your eating habits. There are a bunch of simple things you can do to save money while eating out or buying groceries to take advantage of deals and coupons.
24. Look for specials. Find a place that is doing happy hours or a certain percentage off. Try to take advantage of special deals whenever you can such as Taco Tuesday, Boneless Wing Thursdays or even holiday deals.
25. Skip or share the entree. In most places the entree is well above a “normal” portion size. You can often find large appetizers that can double as an entree like a big plate of nachos. Appetizers are usually $5-10 where as full meals can be $15 or more.
26. Make a list and stick to it. You are less likely to overspend if you make a list and only buy what’s on your list. By making a list you’re making yourself aware of what you’re buying and often you can find deals and coupons ahead of time to sweeten up the deal.
27. Become a member of their club. In some stores, like Costco or Sam’s Club, you can become a member of their organization. These types of memberships can often lead to better deals, personalized coupons and even long-term savings by continuously shopping with them.
28. Skip the name brand. Instead of buying name brand go with the store brand version. It’s often much cheaper by anywhere from $.30 to $.50 depending on what you buy. The store brands are just as good as name brand and in most cases the product comes from the same farm or processing center (aka it’s the same food).
Debt & Loans
It may seem hard but you can find relief with debt. You can consider refinancing your debt or consolidating it to lower your monthly payments. If you have student loans through the federal government you have many additional options on how to handle your student loans.
29. Sign up for income-driven repayment plans. If you have a federal student loan you can qualify for income-based options that will cap your monthly payments at 10% to 20% of your discretionary income. This can be very helpful for individuals who are suffering to cover all of their bills.
30. Ask for a deferment of forbearance. Many lenders are understanding if you’re upfront with them about your situation. If you stay ahead of it and ask them to halt your payments you may be eligible. The interest may still accrue while you have your loans deferred. Private student loans don’t come with the same protections as federal loans but your lender may still grant you a deferment or reduce your payments for a short period of time.
31. Refinance you student loans. If you can qualify for a better interest rate you can lower your payments by refinancing your student loans. If you have federal student loans it is advised that you do not refinance as you will lose all of the federal protections that come with your loans, such as deferment or repayment options. This is likely the best option for someone who has private student loans.
32. Ask for a lower interest rate. If you have improved your credit score, are in good standing with the card issuer and you have not missed any payments you can ask for them to lower your interest rate. It may not always happen but in some cases a card issuer doesn’t factor in your new credit or financial situation in their lending decision.
33. Transfer a card balance. If you have a credit card with a lower interest rate you can transfer your balance from one card to another moving money from a high-interest credit card to a low-interest one. To do so you generally need a higher credit score of 700 or more.
34. Consolidate your credit card debt. A personal loan can offer you the chance to get a lower interest rate and pay off several credit cards at once. If you qualify, this can be a good way to get rid of several high-interest credit cards. You will still have to pay back the same amount but you will likely have a lower interest rate and better terms with a much lower monthly payment.
Miscellaneous & Memberships
An area that most people don’t pay attention to is their miscellaneous spending and monthly memberships they subscribe to. These subscriptions almost always go unnoticed because of how cheap they are but over time they stack up. You’ll notice a $50+ charge on your account but something for $4.99? That could easily just be you picking up a snack at the gas station. This category is mostly where your “wants” live and you should look to balance them out.
35. Limit the number of services you use. You should evaluate if you really need a certain service or not. Does it make sense for you to subscribe to Hulu, Netflix, Disney+, Paramount+, Amazon Prime and Peacock? The answer is likely no, especially if you’re paying for cable. You should find services that you can get multiple features for one payment, such as Amazon Prime. In some cases you can also bundle streaming services like Disney+, Hulu and ESPN+.
36. Share access to services. Subscription services are cracking down on the sharing of logins and passwords. However, if you live in the same household as someone else who is paying for the same streaming services as you then you have an opportunity to split the cost and save some money. Many services offer a “family plan” of sorts where you can have multiple signed in, multiple locations, etc. You should find one that fits your needs and split the cost with others.
37. Negotiate for a lower rate. You may not be able to at franchise gyms like Planet Fitness but a locally owned gym you can often haggle your way down to getting a good deal. If the gym you want is charging more than others in the area you can likely ask for a reduced rate. In some cases gyms will offer reduced rates for new members to bring in new clientele.
38. Find free events and activities or workout at home. Instead of paying for a gym membership find local events or public fitness activities that you can join. In most cities, many yoga studios will hold community classes that are free or by donation. During the spring and summer you can often find these types of classes all over your city. If you can’t find any of those, ditch the gym and start an at-home workout. There are thousands of videos and workout courses online that you can get just as good of a workout at home as you can at the gym.
Magazines & Newspapers
39. Cancel your publications. If you’re not really reading your newspaper or magazines but once in a blue moon, cancel them. You can always resubscribe when you’re ready and even can get a returning discounted rate.
40. Adjust the frequency you get prints. Do you really only care about the Sunday paper? Reduce your subscriptions from daily with newspapers to once a week. You can also opt-in to only get magazines every few months instead of monthly to save on cost.